Daily Archives: September 13, 2017

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If you’ve read Part I of this article, you know that it’s extremely difficult to establish a common law marriage under New York law. And, if this led you to wonder why the system has seemingly abdicated responsibility for issues related to the break-up of long-term living-together relationships, you’re not alone. Why the courts and legislature have taken this approach is puzzling, particularly considering that in contemporary society such relationships are more prevalent than ever.

You may find the answer to be disappointing. It’s what lawyers and judges call, “judicial economy”. This is the idea that certain litigants, as a matter of public policy, should be kept out of the courts. The primary rationale cited is the proverbial opening of the floodgates, though some cite a state interest in promoting marriage. It’s no secret that divorce cases comprise a troublingly high percentage of the courts’ dockets, most studies say it’s as high as 50% in New York State. This means the system is already on overload. So, inviting more litigants into the system to address their divorce-like rights isn’t exactly enticing.

Yet, societal and legal trends expanding the legal definition of terms such as “marriage” and “family” have been accelerating fast. As these terms become more elastic, perhaps lawmakers will reconsider, and begin writing legislation that addresses the dilemmas faced in the dissolution of living-together relationships. Until that time, those of you in non-marital relationships looking to the courts for guidance will likely have to look elsewhere.

One such place is alternate dispute resolution, e.g., mediation or arbitration. Or, you can plan in advance for the possible break-up of your non-marital relationship, by entering into a cohabitation agreement (an especially sensible alternative for those beginning to acquire property or build wealth together). Absent these alternatives, it’s more than possible that there may be no legal solutions to the problems you’ll encounter in the process of dissolving your living-together relationship.

However, before throwing up your hands to denounce the legal system as hopelessly antiquated, read on. There are certain circumstances for which the law does provide answers. In the balance of this article, I will attempt to summarize these circumstances and the applicable legal concepts, most of which derive from tort or contract law, and explain how such might apply to your living-together relationship.

Contractual Rights

The most fundamental legal concept available to unmarried cohabitants interested in establishing their legal rights or obligations is contract law. However, its applicability is severely limited under New York law. Under most circumstances, for any contract to be enforceable it needs to have been reduced to writing and supported by “consideration” (meaning one party gives something up and the other receives something of benefit in return, e.g., payment for services rendered).

The courts have additionally held that the terms of any such contract must be clear and definite. For example, where the promise was to provide domestic services and contributions as a business partner in exchange for an equal share in the other’s business, the court held that the exchange of promises was an enforceable contract. However, a more general promise, such as one to take care of a significant other in the style to which she had become accustomed, in exchange for a promise to introduce and promote the other socially, was held to be inadequate. You should also be aware that any illicit form of consideration is void as against public policy.

The benefits of contract law are generally only available to those who have bargained for and entered into a written contract in advance of their break-up. So, if you’re presently involved in or contemplating a committed living-together relationship, you should strongly consider reducing your respective rights and obligations to contract. This document is akin to a prenuptial agreement and can be referred to as a cohabitation agreement, living together agreement, or the like.

Granted, it may be difficult, unpleasant, or even unadvisable to broach this topic with your significant other. Moreover, you don’t have the ability to induce your significant other to sign a cohabitation agreement by threatening not to go through with the wedding if they won’t sign. Yet, other circumstances, e.g., purchasing or renting a common residence, or even moving in together, can perhaps serve as motivation.

If you surmount these obstacles, you’ll have the benefit of a clear blueprint to follow in the event of separation. Another great benefit of contract law is that most if not all of the legal benefits of a contractual agreement are equally available to same-sex cohabitants. This should also be the case with the balance of legal concepts discussed below.

Property Rights

Assuming that you don’t have a valid written contract, you will have to turn to a far less precise set of legal principles for guidance. Most of these legal principles have existed since long before living-together arrangements became societally or legally sanctioned (in fact, many are common law innovations, meaning that they date back to case law that originated in England and was later adopted by most states, including New York). Some of these concepts have been applied to living-together relationships.

Legal Presumptions

There are certain established presumptions that may provide guidance in the process of disentangling your financial affairs. Certainly, any bank account jointly titled in your respective names, absent agreement to the contrary, is presumptively a fifty-fifty shared asset under applicable banking law. The same should apply to other investment accounts like securities, mutual funds, bond or money market accounts.

Jointly titled or jointly acquired assets that can=t readily be divided in half, such as artwork, an automobile or real estate (see discussion below), are more problematic. Although you might be able to agree to sell and equally divide the proceeds, that course may be impractical or undesirable for economic reasons.

Partition of Real Property

If you own real estate jointly, it will probably be even more difficult to determine your respective rights in the event of a dissolution of your non-marital relationship. Under a legal principle known as “partition”, the rights of joint property holders are determined not just by how title is held, but also by virtue of the relative financial contributions (towards both acquisition and maintenance of the property) made by the title holders. There are lawyers who specialize in this area of practice.

Non-Contractual Rights

An even more troublesome class of property, is assets that were acquired together or through joint efforts and which one of you now holds in sole name or otherwise has within his/her exclusive control. To legally address assets of this type, you’ll need to resort to theories of legal recovery that derive from tort and contract law. Most of these legal concepts were developed with the idea of redressing wrongs perpetrated by one member of a fiduciary relationship against the other (a fiduciary relationship is one that by its very nature gives rise to a presumption of mutual reliance or dependency, e.g., a broker-customer relationship, a relationship between business partners or one between close relatives of unequal bargaining power). These legal concepts include causes of action under partnership law, contract law and tort law, such as economic partnership, express contract, unjust enrichment, fraudulent misrepresentation, constructive trust and quantum meruit restitution, all of which are discussed below.

Economic Partnership

One legal concept that may apply to your living-together relationship is the law related to business partnerships. The courts routinely refer to the financial relationship between the parties to a marriage as an “economic partnership”. In divorce litigation, in order to refute this presumption, you must present evidence showing that the parties actually functioned as separate economic units. So, why shouldn’t the concept of economic partnership be applicable to the dissolution of non-marital relationships, assuming that a party can show that their relationship functioned as an economic unit?

There are reported cases that have accepted this logic. One such example is the case of McCall v. Frampton, which was a suit brought by Ms. McCall, an established business manager of rock and roll acts before she became romantically involved with Peter Frampton, a classic rock guitar icon known for such hits as, “Do You Feel Like I Do?”. Ms. McCall was able to convince the court that management services that she provided to Mr. Frampton free of charge, services of a kind that she had previously been paid for in the marketplace, constituted a thing of value that should entitle her to compensation (namely, a share of the profits of their partnership).

The decision in McCall notwithstanding, establishing an economic partnership under New York law will require a high standard of legal proof. You will need to show that you and your significant other deliberately entered into a business relationship, and that you then proceeded to function as business partners over the course of your relationship. If this was your situation, I strongly recommend that you speak to a lawyer well versed in partnership law.

Quantum Meruit Restitution

In a cause of action for quantum meruit restitution, the question to be resolved is: “Did the moving party confer a financial benefit upon the non-moving party?” This typically could involve housekeeping or homemaking efforts, and, in a more unique case, could include financial, managerial or other marketable services.

As suggested above, it can not include sexual favors, which judges have disapprovingly termed “meretricious” services. Another criterion is whether the alleged contribution was “quantifiable”, or would be more appropriately characterized as “pillow-talk”. Unless the advice-giving cohabitant is a career counselor by day, his or her advice from the sidelines (or more likely, the bedroom) is not likely to be compelling. Again, the case of McCall is illustrative, where Ms. McCall’s prior experience as a rock and roll manager was crucial to the success of her claim.

Under reported New York cases, you must prove the following to make out a case for quantum meruit recovery: (a) good faith performance of the service(s); (b) acceptance thereof by the other party; (c) that you had an expectation of compensation; and (d) that you can demonstrate the reasonable value of the service(s).

Constructive Trust

In a constructive trust cause of action, the movant must prove a confidential or fiduciary relationship with the other party, that a promise was made to him or her, and that as a result the other party was unjustly enriched. The courts speak of a constructive trust cause of action as an “equitable device”, meaning one designed to redress inequality. An example of when the courts might apply this concept, is where one party in a position of trust convinces another to transfer money or property to him or her, based on a declaration or promise that is subsequently broken.

Unjust Enrichment/Fraudulent Misrepresentation

The cause of action known as “unjust enrichment” emphasizes the economic unfairness to the aggrieved party in a particular transaction. The related concept of “fraudulent misrepresentation” involves the same unfairness, but with an added element of fraud. This means that the misrepresentation at issue must have induced the defrauded party to take or omit to take an act that resulted in some substantial detriment.

Palimony

Lastly, under New York law, there is no such thing as “palimony”. Again, the concept of judicial economy was a driving force here. The concept of palimony first came to public attention in Marvin v. Marvin, 18 Cal. 3d 660, a California case, decided in 1976, which involved a non-marital relationship between the legendary film actor/action hero, Lee Marvin and Michelle Trola Marvin. In that case, the court afforded Ms. Trola Marvin the right to attempt to prove that an implicit or express contract involving Mr. Marvin=s earnings and assets was entered into between the parties. This case paved the way for recognition of palimony as a recognizable cause of action in California.

However, on this side of the continent, the courts have viewed the issue quite differently. In 1980, New York’s highest court, in Morone v. Morone, 50 N.Y.2d 592, decided that it would not recognize palimony as a valid cause of action on the grounds of public policy. As a result, palimony has been a disfavored cause of action in New York ever since.

Conclusion

A word of caution, each of the legal concepts described above is applicable only under special circumstances. Again, reference to the interesting case of A vs. A, may help to bring this home. Although Mr. and Mrs. A’s relationship lacked the formal sanction of marriage, they were virtually universally assumed to be a traditional married couple. After Mrs. A’s common law marriage cause of action was dismissed (as described in Part I of this article), she proceeded under some of the contract and tort law principles discussed above (including constructive trust, quantum meruit, economic partnership, unjust enrichment and fraudulent misrepresentation).

I believe that what enabled Mrs. A to prevail, in the face of Mr. A’s motion to dismiss, were the compelling and special circumstances that she was able to demonstrate. Specifically, when the parties embarked on their living together-relationship, they were in their late-20’s to early 30’s, and had yet to achieve the significant financial success that they would later in life; Mr. A was still plying his trade as an oil burner furnace serviceman, and Mrs. A hers as a dental technician. Yet, over the course of their relationship, they built a successful business together. Mrs. A was integrally involved in both the development of the product, and in fulfilling many of the demanding functions involved in building a business from the ground up (including physically challenging and dangerous jobs like making late-night cash deposits in sometimes marginal neighborhoods).

By the time of their separation, they had a number of investments in joint name, filed joint income tax returns for most years of the relationship, adopted common estate plans, and jointly owned residential apartments, including the penthouse apartment they lived in up to their separation. During the years in which they built their substantial wealth, Mrs. A served as corporate officer and secretary of their primary business, and, as they expanded into property holding and development, she was issued shares in one or more corporate holding companies.

And lastly, but perhaps as importantly, Mrs. A was able to prove these facts. As is often the case after litigation commences, when Mrs. A attempted to obtain certain documents in order to prove her claims, Mr. A contended that the documentation no longer existed, was no longer under his possession or control, or never existed in the first place.

Consequently, it was crucial that Mrs. A had the foresight to retain and copy hundreds of documents before litigation was initiated. As a result, she was armed with an arsenal of paper that would help prove her claims.

So, my last word of advice is to do more than just keep yourself informed and knowledgeable about your financial affairs. Also, be wary enough to collect your documentary proof, and to do so before it’s too late. Otherwise, you may find that you’re barred from locations where documents are kept, and that documents have been thrown out, hidden, shredded, or otherwise placed beyond the reach of legal process.

And lastly, the case of Jennings v. Hurt (discussed in Part I of this article) illustrates that you can’t tailor the facts of your case to fit your claims. In dismissing Ms. Jennings’ common law marriage cause of action, the court also refused her request for permission to amend her complaint to add three non-marital causes of action (constructive trust, breach of contract and breach of a promise to support), leaving her with effectively no legal remedy, except for the right to receive child support for their common child.

Critically, the courts require a proponent of any one of the legal theories described above to specifically plead and prove the specific elements of the given cause of action. This was the case with respect to Ms. Jennings’ proposed constructive trust and breach of contract causes of action, which were held insufficient, as a matter of law, due to failure to plead specific elements of the cause of action. It should come as no surprise (in light of Morone) that the Court dismissed the third proposed cause of action, which it considered to be a mere promise to support in return for “wifely” duties, in essence a palimony claim, finding it to be void as against public policy.

The lawyer for Ms. Jennings contended, rather unconvincingly, after losing on the trial level, that the trial judge had been blinded by Mr. Hurt’s celebrity (even claiming that the judge had fallen in “love” with Mr. Hurt). Yet, issues of relative credibility aside, it seems clear to me from the face of their respective allegations that the degree of financial interdependence involved in the relationship between Ms. Jennings and Mr. Hurt, didn’t compare to the interdependence that existed between either Ms. McCall and Mr. Frampton, or between Mrs. A and Mr. A for that matter.